4 Reasons Why Credit Monitoring Should Be Your New Year’s Resolution
If you’re like 42% of the population, you’ve made a New Year’s resolution (or two, or more) about improving your financial outlook.
Part of the problem with resolutions is that it’s easy to make them, and much harder to follow through. This is why only about 9% of people actually achieve what they set out to do in the beginning of the year.
Researchers agree that the key to sticking to resolutions isn’t about summoning some superhuman willpower; it’s about setting goals you can clearly define and easily track and monitor.
One of the best ways to define and measure progress toward your financial goals is to keep regular tabs on your credit report and scores. It’s simple to do — by signing up for a credit monitoring service that you can access any time you want. At the very least, we recommend claiming your free annual report from the top three credit bureaus (Experian, TransUnion and Equifax).
Here are four important reasons why credit monitoring should be your New Year’s resolution:
1. Strong credit scores open doors – and saves you money.
You have big dreams. Maybe you’re planning on buying a home, getting a new car or starting a new business. Your credit scores directly affect the size of the loans you qualify for and the interest rates you pay. Higher FICO scores get you lower interest rates and can potentially save you thousands of dollars. They also affect your car and home insurance premiums, too. Again, the better your credit, the better rates you’ll get from insurance agencies. If you’re planning to make a major effort to increase your scores this coming year, whether you’re going to pay down your credit card debt or start reporting your rent payments to credit bureaus, you’ll want to keep an eye on how your score changes over time. Putting your focus on your scores will help you also set your sights on achieving your goals.
2. Credit monitoring can help you catch identity theft before major damage is done.
Did you know that identity theft is at an all-time high? Javelin Strategy & Research found in their 2017 Identity Fraud Survey that $16 billion was stolen from 15.4 American citizens. As our digital economy expands, there are more and more ways that your private information can be compromised. By checking your credit periodically, you’ll be able to easily see if there’s been any unauthorized or fraudulent activity associated with your name and Social Security number, such as new credit card accounts that you don’t recognize or didn’t open, or a new address that isn’t where you live. It’s crucial you shut down such activity before your credit scores are negatively impacted. Credit monitoring services, like the one we offer RentTrack users, should provide the name and contact information of the financial institution on the account so you can get in touch to shut down unauthorized activity fast.
3. You may discover issues that are negatively impacting your credit scores.
Sometimes there are bills you’ve forgotten to pay or didn’t even know you had, such as a utility bill that wasn’t canceled after a move. Cleaning up past-due payments will not only save you money in late fees, it will also help improve your scores. Similarly, you’ll be able to spot erroneous charges and dispute them. According to the Federal Trade Commission, approximately one in four people identify potential errors on their credit reports that might be affecting their credit scores. Monitoring your credit makes it easier to spot such problems, pinpoint whether or not the mistakes are actually reporting issues, and resolve them.
4. It helps you be realistic about your financial decision making.
If you’re not in touch with your current credit scores, you may be caught off-guard when you’re offered relatively unfavorable terms for a credit card or loan, such as higher interest rates, or are flat-out denied. Your credit score is what businesses and other creditors look at when accessing their risk; the more realistic you are about it, the better prepared you’ll be for the outcome — either positive or negative — of your applications.
Of all the resolutions you may have made for the New Year, improving your financial well-being is the key to achieving many of your dreams. Take a clear and simple step by starting to monitor your credit today.